[ET Net News Agency, 26 June 2020] Jefferies Research lifted its target price for KWG
Group Holdings (01813) to HK$15.38 from HK$14.66 to factor in the higher profitability of
the spin-off and its latest land banking. It maintained its "buy" rating.
The research house said KWG submitted the spin-off application for KWG Living last
night, slightly earlier than Jefferies expected. It is surprised by this lucrative
business (backed by its high commercial property exposure) and estimated a fair value of
HK$12bn that is equivalent to 30% of KWG's market-cap.
Jefferies expects the spin-off to be completed by year-end. It believes this highly
profitable business is yet to be fully reflected in KWG's current 5.3x FY2020 P/E.
Jefferies likes the company's 25-30% sales/earnings CAGR and 8-13% dividend yield in the
next three years. (KL)